'Cut the Cards: making SAP work' - Book review

At first glance you may wonder what relevance this book could have to you. Don't be put off by the title as it is not a book for SAP 'techies'; it is much more and I would view it as recommended reading for anyone on an MBA course or with an interest in PRINCE2. I suspect those who would benefit most though would be those designated as Sponsor of an ERP implementation and those charged with an oversight or scrutiny role.

Donnelly has produced an easily readable book on what could be a very dry subject and his black humor works very effectively. Having said that, assuming there is a second edition, I think the addition of section headings would be beneficial.

In a forensic analysis of public and private sector IT implementation disasters, Donnelly provides a diagnosis of what he believes really went wrong: cash-flow, poor leadership, self-serving partners, poor project management, poor risk management, and poor contract management are all there.  Key lessons for me are the need to modify SAPs standard processes as little as possible, so change management should be concerned with moving from the As-is to the correct SAP process, having the correct governance in place and use PRINCE2 methodology.

Also covered, although indirectly, is SAP's marketing strategy - a good case study in itself.

But what's there for a procurement practitioner? If there's an ERP project the CPO needs to have a seat at the table as part of the business case development, specifying, contract drafting, selection, risk management, change management and contract management. Then the CPO needs to be engaged with Blueprinting the To-Be - I have previously discussed how that should be an opportunity for procurement transformation, yet too often is missed through automating the existing, yes, that still happens!

Procurement policy, hubris and the cloak of invisibility.

I suspect this week is not the best time to discuss the Christmas Party at CCS given the press attention to IT procurement. Saturday had an excellent feature in Times2 on why government IT projects go wrong, then today's Times had four separate pieces on the Aspire Debacle, for example: here.

To me the big issue isn't yet another IT procurement debacle, it's the issues of procurement policy, hubris and invisibility . 

The political leader of UK government procurement, also famous for his Jerrycan approach to 'bottleneck purchases', is Francis Maude, the Cabinet Office minister. Earlier this year he decreed that IT procurement policy was that there would be no contracts over £100m - small was considered beautiful regardless of the risks!

Now in spite of a long history of not implementing procurement policy, it seems this 'small is good policy' is going to break the mold and actually be implemented by splitting the major HMRC Aspire project into smaller contracts. I need not join the chorus of those who argue this is high risk, but included in that chorus are some notable voices from the CBI, Public Accounts Committee and Public Administration Select Committee.

A Cabinet Office spokesperson is reported to have said though "HMRC intends to break this contract into packages which is entirely in line with our new approach and will ensure competition from the widest possible  range of suppliers". There is no admission that this may be a demonstration of procurement hubris or even stupid sourcing, just that it is in line with policy. Nor was there any confirmation that discussions with the market have provided confirmation that SMEs will indeed be willing and able to bid! 

Nevertheless, since it's in line with policy, it must be okay? What we have not heard is the voice of the Government's CPO providing an endorsement for the procurement approach. Does he agree with it in this particular case? Does he disagree with it but can't publicly say that? Does he believe that in spite of the accepted positioning of such an IT procurement as 'strategic' within a Krajic model, he has a better recommended strategy which the rest of the 'procurement pack' have yet to see? Then again, what about the Major Projects Authority - haven't they a role in disaster avoidance or do disaggregated contracts of less than £100m avoid their radar?

There's another interesting quote from an HMRC spokesman: "We will renew our IT contract within Cabinet Office guidelines and on time."  Is that a buck passing statement to the effect that if it all goes wrong the HMRC only followed Cabinet Office guidelines? The pedants among you will of course have noticed that the only commitment is to delivery of the 'IT contract ... on time' which does not necessarily mean the actual functional delivery of the service being procured. Isn't it wonderful that the project is called Aspire! 

Can the loss of £100m be a good news story for procurement?

The PwC report into the failed BBC Digital Media Initiative has now been published. We know masses
 of public money was wasted and we know, with the benefit of hindsight, that we'd all have done a better job and pulled the plug earlier. But I think this report is actually a good news story, particularly for complex contracting, if the high profile of the debacle leads to the report being read and learnt from. Learning the lessons could lead to many more doomed projects being aborted earlier and therefore unnecessary costs avoided.

The report suggests that there was an absence of an effective governance structure which enabled challenge of time, cost and quality. This has been a common problem with complex contracts and reminds me of the problems with the Scottish Parliament building when David Steele announced he was kept in the dark by civil servants on progress. It is not enough for those in decision making roles to 'approve' they also need the confidence to ask challenging questions as part of risk management.

There was a failure recognise that the DMI was more than a technology solution and needed effective business change management too. Reporting was based on the technology risks and failed to give due attention to the business change management risks. Again this isn't a first but remains, to me, one of the key reasons IT projects fail - it's a bit like giving someone who has never had a telephone a brand new iPhone and assuming they will immediately understand why and how to use it. The power in technology, to me, isn't in the machine but the capacity and willingness of stakeholders to harness its potential.

Thus spake PAC on Universal chaos and waste

"...the Department lacked an overarching business transformation strategy, and focused its effort on the programme's IT aspects. The failure to develop a comprehensive plan which will deliver these important changes has led to substantial nugatory expenditure which has yet to be finally determined and extensive delays in the implementation of the programme. 

 The Department accepts that timescales have slipped and that value has not been secured from the X million[s] invested so far. There has been a shocking absence of financial and other internal controls and we are not yet convinced that the Department has robust plans to overcome the problems that have impeded progress. Our recommendations are designed to help get the programme back on track. In particular the Department needs a robust plan on how to transform its business and what is required from the new IT systems it intends to use to support the transformation. If the Department is to secure the benefits it seeks, the new IT capabilities must enable more online operations, must address fraud risks, and result in a system capable of handling the real-world complexities of [key users] circumstances. The Department must be realistic and transparent about its expected costs and timescales, and the milestones against which we can hold it to account. We believe strongly that meeting any specific timetable from now on is less important than delivering the programme successfully."

It's highly likely that a high proportion of the millions invested will have to be written off. Without even getting beyond the summary, it isn't hard to ask "aren't these the basics of PRINCE2 and MSP?"  However, how many other projects could the same narrative apply to with a little 'cut and paste'?

But just in case you thought this was all the fault of IT strategists and policy wonks;  procurement were also named and shamed: